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Indian Banks Recovered ~16% of the Rs 16.6 Lakh Cr. They Wrote Off From 2014 to 2024: RTI

Recovery rates have remained low across all banking sectors for which the RBI provided data.
Representative image. Photo: Ravi Roshan/Pexels.
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New Delhi: Since April 1, 2014, Indian banks have written off loans worth Rs 16,61,310 crore, according to data from the RBI in response to a Right to Information (RTI) query by Prafful P. Sarda, a civil rights activist.

The data, which extends to September 30, 2024, shows that only Rs 2,69,795 crore of this amount has been recovered.

The RTI response breaks down the write-offs by bank category. Public sector banks led with write-offs of Rs 12,08,621 crore, followed by private sector banks at Rs 4,46,669 crore and urban cooperative banks at Rs 6,020 crore.

Recovery rates have remained low across all sectors. Public sector banks recovered Rs 2,16,547 crore, while private sector banks recovered Rs 53,248 crore.

The RBI noted that recovery data for urban cooperative banks was unavailable.

With Rs 13,91,515 crore still unrecovered, the overall recovery rate stands at roughly 16%.

Data from RTI response. Figures in Rs crore.

According to data disclosed by Union minister of state for finance Pankaj Chaudhary in response to a question in the Lok Sabha in November 2024, bank write-offs reached Rs 1.7 lakh crore in the financial year 2023-24 (FY24) – the lowest in five years after peaking at Rs 2.34 lakh crore in FY20.

Punjab National Bank, the Union Bank of India and the State Bank of India reported the highest write-offs among public sector banks, while HDFC Bank, Axis Bank and ICICI Bank led among private sector banks.

Though overall write-offs decreased in FY24, more than 20% of banks reported higher write-offs than the previous year.

The RBI explained that most write-offs occur for technical, prudential or collection-related reasons. Banks maintain the right to recover loans even after writing them off, as the process serves primarily as an accounting practice for balance sheet-management and tax efficiency. The write-off does not release borrowers from their repayment obligations.

But Sarda, who had filed the RTI query with the RBI, charged in a statement that in the absence of a prescribed time frame for the recovery of outstanding amounts, “lakhs of crores of public funds are lost for all practical purposes as the banks keep issuing rosy balance-sheets each year”.

He also said that in line with a 30-year-old RBI policy, it is banks and their boards of directors that handle all credit-related matters, decide recovery policy and determine the amounts that are to be recovered.

“In this scenario, will finance minister Nirmala Sitharaman announce stricter norms to pin accountability on lenders, right from the managers to the board of directors – and in case of NPAs [non-performing assets] – recover the lost amounts from the banks’ own executives for their lapses and poor judgement?” Sarda asked.

A separate RTI response from August 2024 indicated that banks have recovered just 18.7% of written-off loans in the past five years.

The RBI’s September 2024 figures remain provisional. The response excluded data from state cooperative banks and district central cooperative banks, as the RBI does not collect this information. All provided data comes from banks’ off-site returns.

This article was updated at 2:20 pm on January 28 with quotes from Sarda.

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